Anixter International Inc. Financial Statement Analysis
ANIXTER INTERNATIONAL INC.
In connection with the entry into the Receivables Facility, on October 5, 2015, Anixter Inc. and ARC entered into a Third
Amended and Restated Receivables Sale Agreement (the "Amended and Restated RSA"), which amended and restated the
existing Second Amended and Restated Sales Agreement. The purpose of the Amended and Restated RSA is (i) to reflect the
entry into the Receivables Facility and the termination of the Second Amended and Restated Receivables Purchase Agreement;
and (ii) to include in the receivables sold by Anixter Inc. to ARC receivables originated by Tri-Northern Holdings, Inc. and its
subsidiaries (collectively, the "Tri-Ed Subsidiaries") and subsidiaries acquired in the Power Solutions acquisition (the "Power
Solutions Subsidiaries").
On November 16, 2018, Anixter amended the Receivables Facility to extend the maturity date from October 5, 2020 to
November 16, 2023.
Inventory Facility
On October 5, 2015, we and certain of our wholly-owned subsidiaries, including the Tri-Ed Subsidiaries and Power
Solutions Subsidiaries, entered into the Inventory Facility, an asset based lending revolving credit facility, in an aggregate
committed amount of $150.0 million. Borrowings under the Inventory Facility are secured by a first lien on Anixter Inc.'s and
certain of its subsidiaries' personal property and supported by a guarantee by Anixter International.
The Inventory Facility has a borrowing base, (a) with respect to appraised eligible domestic inventory, of the lesser of
(i) 85% of the net orderly liquidation value of such inventory and (ii) 75% of book value of such inventory, plus, (b) with
respect to eligible domestic inventory not appraised, 40% of the net orderly liquidation value of such inventory, less (c) certain
reserves.
On November 16, 2018, Anixter amended the Inventory Facility to extend the maturity date from October 5, 2020 to
November 16, 2023.
The Receivables Facility and the Inventory Facility (collectively, the "Combined Facilities")
The Combined Facilities drawn pricing will range from LIBOR plus 125 basis points when the combined unused
availability (the "Combined Availability") under the Combined Facilities is greater than $500.0 million or LIBOR plus 150
basis points when Combined Availability is less than $500.0 million. Undrawn fees are 25 basis points.
Acquisitions and restricted payments will be permitted, subject to, among other things, (i) Combined Availability of at
least $131.3 million after giving pro forma effect to any acquisition or restricted payment or (ii) (a) Combined Availability of at
least $93.8 million and (b) maintenance of a minimum fixed charge coverage ratio of at least 1.1x, after giving pro forma effect
to the acquisition or restricted payment.
The Combined Facilities provides for customary representations and warranties and customary events of default, generally
with corresponding grace periods, including, without limitation, payment defaults with respect to the facility, covenant
defaults, cross-defaults to other agreements evidencing material indebtedness, certain judgments and events of bankruptcy.
Canadian Term Loan
On October 5, 2015, we, through our wholly-owned subsidiaries, Anixter Canada Inc. and Tri-Ed ULC, entered into a
$300.0 million Canadian dollars (equivalent to approximately $225.0 million USD) Canadian Term Loan. The Canadian Term
Loan was guaranteed by all present and future material Canadian subsidiaries of Anixter Canada Inc. and Tri-Ed ULC as well
as Anixter Mid Holdings BV. The Canadian Term Loan was secured by a first priority security interest in all of the assets of
Anixter Canada Inc. and each of its Canadian subsidiaries, which comprise the borrowing group.
In the fourth quarter of 2017, the Company paid off the Canadian Term Loan in full.
Our debt-to-capital ratio decreased from 44.4% at December 28, 2018 to 36.3% at January 3, 2020, below our targeted
range of 45-50%.
We are in compliance with all of our covenants and believe that there is adequate margin between the covenant ratios and
the actual ratios given the current trends of the business. For further information, including information regarding our credit
arrangements, see Note 5. "Debt" in the Notes to the Consolidated Financial Statements.
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